The coalition government are on an ‘all-out mission’ to reignite ailing British industry said the Prime Minister. And part of this is using almost Â£1 billion of taxpayers’ money to create 35,000 jobs.
That’s a tad over Â£27,000 per job.
This money should, says Nick Clegg the Deputy PM, attract private funding of about Â£6 for every pound of taxpayers’ money invested into 100 ‘shovel ready’ projects. The PM has also given the go-ahead for the building of two new power stations at Ferrybridge, West Yorkshire and Thorpe Marsh, near Doncaster that bring 1,000 new construction jobs with them.
But this is not new money as Labour points out. This is the final part of the Â£1.4 billion regional growth fund. But the fund will help to create or protect ‘hundreds of thousands of jobs’ said Mr Clegg.
But the shadow business secretary, Chuka Umanna, dismissed this saying that the PM was ‘out of touch’ and not addressing the need for economic growth. “This does not amount to the significant plan for jobs and growth Britain's economy desperately needs right now” he said.
But this Â£1 billion is coming from taxpayers either now or in the future, who will then presumably have less to spend elsewhere. Or it will be diverted from public services.
There is also the question of demand. If the new jobs are created in the areas that the government want, will people actually pay for the output? If they would why hasn’t the private sector already stepped up to the plate with the investment? So one has to wonder at the Â£6 to Â£1 ‘estimate’ of private to public sector investment.
Two new power stations? Do we actually need them right now other than as job generators? And when built does that mean that we have a surplus of power, or will other stations and jobs be retired? And what then for the 1,000 workers who built them?
Many people now think the UK is staring into the face of a new recession. Although technically this would be a new recession the truth is that we never really got out of the last one. Financial tinkering and sleight of hand made it appear that we had climbed out of the hole, but all we did was rob Peter to pay Paul so that the figures looked good.
When asked ‘how do we get to economic recovery?’ anyone would be forgiven for answering ‘well I wouldn’t start from here mate!’
The stark truth is that to get an omelette of true economic stability a lot of eggs would need to get broken. Something no politician would allow if they could control it. But in the end, whatever they do eggs will get broken. And it seems that it is always the eggs at the lower end of the scale that end up buried in the omelette.